Should You Refinance Your Auto Loan?
Everyone can benefit from saving a few extra dollars here and there. One option many people may not realize they have is to refinance their auto loans. Much like refinancing a house, refinancing a car can lead to lower monthly payments and less interest owed over time.
Is refinancing right for you? Here are a few indicators to consider.
Your Interest Rate is High
Does your interest rate feel high? It could be, if you purchased your car when market rates were higher. Now, with rates relatively low, you might have an opportunity to refinance at a lower rate. By adjusting your rate, you’ll pay less interest over the life of the loan.
Your Credit Has Improved
Has your credit improved since you’ve purchased? If so, it’s worth attempting to get a lower rate and potentially saving yourself hundreds of dollars in the process.
If you’re not sure where your credit score stands, check it at annualcreditreport.com. Be sure to do this at least once a year to check for errors. Credit not as good as you’d like? We’ve put together some tips to help you improve it.
You can’t Afford Your Monthly Payment
Life happens. You might find yourself in a situation where you aren’t able to keep up with your payments. With a refinance, you could both lower your rate and extend the life of your term, lowering your current monthly payment. Be careful though. Extending the life of your term could cost you more in interest in the long run.
You Want to Pay Your Loan Off Quicker
Maybe you have a goal to be debt free or simply pay off your loan faster than the term of the loan. By refinancing to a lower APR, you can keep paying what you’re paying now, but you’ll be putting more towards the principle. The longer you plan on keeping your car, the more you will save.
You Want to Remove Someone from Your Loan
A refinance is sometimes about more than saving money. A divorce or separation may spark a need to take a co-signer off a loan. A refinance allows that opportunity, with the potential of cost savings in the end.
You Have Better Options with a New Lender
Does the lender you’re with offer conveniences that Rivermark doesn’t? Services such as Skip a Payment, easy online payments and no payments for the first 60-days are values that not all lenders will offer.
If you are looking to pay off your car faster, be sure to choose a lender with no prepayment penalties, like Rivermark.
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